The Central government has told the Supreme Court that selling mineral water bottles above the maximum retail price (MRP) will attract jail term and fine for the management of restaurants, hotels, multiplexes, etc, reported News 18.
The centre said continuance of the practice would be “tax evasion” and not just against customer interest.
“Sale of packaged water over MRP by hotels and restaurants may have implications regarding tax evasion as a bottle purchased by a hotel at cost price, which should be sold at MRP or less, is being sold at much higher prices, leading to possible loss of additional revenue to the government in the form of service tax or excise duty etc.,” said the government, according to News18.
Submitting its affidavit in response to a petition filed by the Federation of Hotel and Restaurant Associations of India (FHRAI) against a Delhi High Court ruling, the Ministry of Consumer Affairs has maintained that overcharging for pre-packed or prepackaged products was an offence under the Legal Metrology Act, 2009.
Section 36 of the Act says, “Whoever manufactures, packs, imports, sells, distributes, delivers or otherwise transfers, offers, exposes or possesses for sale, or causes to be sold, distributed, delivered or otherwise transferred, offered, exposed for sale any pre-packaged commodity which does not conform to the declarations on the package as provided in this Act, shall be punished with fine which may extend to twenty-five thousand rupees, for the second offence, with fine which may extend to fifty thousand rupees and for the subsequent offence, with fine which shall not be less than fifty thousand rupees but which may extend to one lakh rupees or with imprisonment for a term which may extend to one year or with both.”
In 2015, a division bench of the Delhi HC upheld the government’s authority to prosecute restaurants and hotels selling bottled mineral water above MRP under the Act. The court further clarified that ambience and other facilities such as air conditioning will not act as precedent for charging more than the MRP of the bottle.
About a Kerala High Court order approving overcharging on soft drinks, the government has clarified that this order has been appealed against and therefore, it could not be cited as a legal precedent.